Lithia Motors Inc., a publicly held dealership group concentrated in the West, is expanding east with a plan to become a national chain in 10 years, CEO Sid DeBoer says.
Late last month, Lithia acquired its first dealership east of the Mississippi River -- Eversole Motors in La Crosse, Wis. Terms were not disclosed. Lithia, of Medford, Ore., has dealerships in two other Midwestern states, Nebraska and South Dakota.
Lithia will rename the Wisconsin store Lithia Chrysler-Jeep-Dodge of La Crosse. It will contribute about $25 million in annual revenue, the company estimates. Lithia reported group revenue of $2.93 billion in 2005.
DeBoer says the stability of Midwestern communities appeals to his company. "People in those states have less mobility," he told Automotive News. "They tend to stay with the same company, and there is less employee turnover. Businesses are built on loyalty."
Lithia seeks to expand to markets with sales of 4,000 to 8,000 new vehicles a year, DeBoer says. The company has identified 135 desirable markets east of the Mississippi and 70 markets west of the Mississippi, he adds.
Lithia sells 25 brands and operates 96 dealerships in 13 states. DeBoer says he expects the company to grow to 350 stores across the country, based on its annual 15 percent expansion rate.
The company normally buys dealerships one or two at a time. But it is hunting for a large, Midwestern dealership group it could use as a platform for future growth, DeBoer says.
"We may creep across (the East), or we may take one leap if we can find a group that will give us the infrastructure," he says. "We did that in Texas when we bought the Lynn Alexander group. Now Texas is our third-biggest state. It is a huge opportunity -- more attractive than California."
Lithia bought the Lynn Alexander Auto Group in 2002. That purchase added three multifranchise dealerships with $115 million in annual revenues.
The group's steady expansion allows it to establish the infrastructure to run dealerships in remote locations with little capital outlay, DeBoer says. Some regional employees work out of their homes or at dealerships, he says.
"Where you have your headquarters is less and less important with the Internet, the ability to communicate and centralized bookkeeping and processes," he says. "We are learning how to operate nationally."
You may e-mail Donna Harris at [email protected]